Global chip sales up in early 2007; 2006 was banner year for AMD

The Semiconductor Industry Association has crunched the latest chip sales numbers, and the results paint a picture of an industry in transition. On the one hand, February's semiconductor sales totals were down 6.5 percent from the previous month, with most of the downturn due to regular seasonal factors. Other factors were lower average selling prices and a drop in shipments of microprocessors and DSPs.

But even though February sales were down compared to January, they were still up 4.2 percent versus February of last year. In fact, this 4.2 percent increase is where the most interesting part of the semiconductor sales story lies. A closer look at the SIA data shows that year-to-year semi sales in the Americas were down 8.6 percent, while sales in the Asia-Pacific region were up 10.1 percent (for an average increase of 4.2 percent). Yet again, we see Asia consuming a larger relative share of the global semiconductor pie, which is precisely why Intel is so keen on building a real fab presence in China.

In addition to the SIA's semiconductor sales numbers, Gartner has released a fresh round of rankings for 2006. First up is Gartner's semiconductor manufacturing equipment vendor rankings—this is basically a list of companies supply the equipment that enables semiconductor makers like Intel to design, test, and manufacture chips. I won't bore you with the details of the list, since most readers won't have heard of most of the companies on it, but it's worth noting that overall sales of chipmaking equipment were up 22.6 percent in 2006. This bump in chipmaking equipment means more fab capacity for 2007 and 2008, and more capacity should in turn mean more sales if demand holds up. Some of this increase in chipmaking equipment sales was driven by memory makers, who expect the market's appetite for solid state storage to continue to grow.

The other big Gartner list that came out today was the 2006 rankings for semiconductor sales. As always, Intel topped the list of semiconductor makers, with a market share of 11.6 percent. Memory firms made up much of the rest of the Top 10, with processor makers AMD and Freescale fill the bottom two slots at 2.8 and 2.3 percent market share, respectively.

The biggest story in these sales ranking numbers for 2006 was the rise of AMD. AMD post 86.1 percent revenue growth versus 2005, an increase that vaulted the company into the Top 10. The Gartner numbers agree closely with the iSuppli numbers that we reported earlier, numbers that also had Intel's revenues down 11 percent in 2006 (Gartner shows a 12 percent decline). Intel is on track to turn things around in 2007, so the big question for AMD is how much of their 2006 momentum they can sustain. This is why the company absolutely has to deliver the goods with Barcelona.